--Analysts see buoyancy to the soybean market amid solid export demand and smaller projected U.S. soy acres

--USDA announced the sale of 165,000 metric tons of soybeans to China

--Traders are still on guard for signs of managed funds reducing risk

CHICAGO (Dow Jones)--Traders and analysts expect strong demand to promote a higher start for U.S. soybean futures Friday.

Analysts expect soybeans to start 1 cent to 2 cents higher.

In overnight trade, soybeans for May delivery were up 1 1/4 cent to $14.42 1/4 a bushel.

May soybean meal was up $0.80 to $395.40 a short ton, and May soybean oil was down 0.32 cent to 56.91 cents a pound.

There is some buoyancy to the soybean market, with solid export demand, smaller projected U.S. soy acres and declining South American production forecasts underpinning prices, said Jason Britt, analyst with brokerage Central States Commodities.

Fresh export sales to China will give some added support to attract buyers, Britt added.

The U.S. Department of Agriculture said private exporters reported the sale of 165,000 metric tons of soybeans to China for delivery in the 2012/2013 marketing year.

Expectations for tighter supplies and growing demand continue to provide strength for soybean prices.

Smaller South American crop sizes place more pressure on the U.S. to replenish world supplies. Investors are maintaining their bullish stance in soybeans on fears the U.S. can't afford to have any crop issues in 2012, as Argentina and Brazil won't provide a comfortable supply cushion for world importers, Britt said.

Traders also are worried about whether U.S. farmers will plant enough acreage this year to meet demand.

Yet traders are still on guard for signs of managed funds reducing risk in the market amid the large buildup of long positions by investment funds.

A long position is essentially a bet by traders that prices will rise.

Soybeans have buoyancy, but there is the risk of funds taking profits ahead of the weekend, Britt said.

"The funds are all tilted to the long side of market, and if everyone is on one side of the boat, it could tip over," Britt added.

Soybean futures settled at a seven-month high Thursday, despite failing to challenge highs set earlier in the week.